"Janet Yellen Charting Brave New Course With Changing Cast of Characters"
In this month’s Municipal Strategy we discuss the challenges facing Janet Yellen as she deals with a historic retreat from extreme monetary intervention, while facing divergence in global monetary policies, and copes with four new voters and three vacancies on the FOMC. Is she up to it? Yes she is — but that doesn’t mean that the market can’t get volatile anyway!
We talk about the huge onslaught of IPO activity and its implications for economic expectations, business confidence, investment, wealth related consumption and capital gain realizations. The latter is great news for state governments like California that feast on capital gains tax revenues.
We analyze how much additional points investors have paid to “buy down” their discounts on Puerto Rico debt—a quasi-insurance policy against an across-the-board cut in principal should the island decide to restructure its debt — and whether it is worth it or not.